After losing $3.8 million in a Sept. 27 hack that exploited a known but unaddressed security vulnerability, decentralized finance (DeFi) protocol Onyx received community approval to relaunch its open-source, permissioned financial network, Onyx Core as a key product to strengthen its governance.
The Onyx Improvement Proposal “(OIP)-46: Relaunch Onyx Core” was introduced on the same day, shortly after the $3.8 million security exploit. The proposal called for major changes to the protocol and its product offerings, including shutting down its Ethereum-based lending market and reimbursing the lenders “in full at a 1:1 payment of the assets they supplied.”
Source: Onyx
By Sept. 29, the OIP-46 proposal had received the full support of the Onyx community members, with no votes against the proposed changes. The proposal is set to be executed on Oct. 1.
OIP-46: Relaunch Onyx Core voting details. Source: app.onyx.org
The Onyx team will issue a revised white paper for Onyx Core’s relaunch as a primary product alongside Onyxcoin (XCN) staking.
Onyx re-evaluates core business offerings
The restructuring will also involve running the Onyx Protocol as a closed-ended lending protocol on Onyx Core, allowing users to wrap non-fungible tokens, real-world assets (RWA) and crypto assets.
The Onyx hacker manipulated an NFTLiquidation contract to inflate the self-liquidation reward amount. According to blockchain security firm PeckShield, the vulnerability was previously used to attack Onyx in October 2023.
Related: Hacker behind $2M crypto heist receives job offer from victim protocol
Other hacks exploiting the same vulnerability include the Hundred Finance hack in April 2023. The proposed restructuring aims to secure the Onyx Protocol from future attacks.
Crypto hackers prefer attacking centralized exchanges
According to Web3 cybersecurity company Cyvers, losses from crypto hacks in the first three quarters of 2024 exceeded $2.1 billion.
Centralized finance operators such as crypto exchanges were the biggest target, with a 984% year-on-year increase in the first three quarters of 2024. Much of that came in the year’s second quarter when $401 million was lost.
While losses in the DeFi sector dropped 25% year-on-year in Q2, the sector still saw $171.3 million lost from 62 incidents.
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